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Management of the Catering Company would like the Food Division to transfer 10,000 cans of its final product to the Restaurant Division for $30. The Food Division sells the product to customers for $70 per unit. The Food Division's variable cost per unit is $35 and its fixed cost per unit is $10. If the Food Division has 7,000 units available capacity, what is the minimum transfer price the Food Division should accept? $50 O $35 ○ $45.5 $70 None of the above

Management of the Catering Company would like the Food Division to transfer 10,000 cans of its final product to the Restaurant Division for $30. The Food Division sells the product to customers for $70 per unit. The Food Division's variable cost per unit is $35 and its fixed cost per unit is $10. If the Food Division has 7,000 units available capacity, what is the minimum transfer price the Food Division should accept? $50 O $35 ○ $45.5 $70 None of the above

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Management of the Catering Company would like the Food Division to transfer 10,000 cans of its final product to the Restaurant Division for $30. The Food Division sells the product to customers for $70 per unit. The Food Division's variable cost per unit is $35 and its fixed cost per unit is $10. If the Food Division has 7,000 units available capacity, what is the minimum transfer price the Food Division should accept? $50 $35 $45.5 O $70 None of the above
Transcribed Image Text:Management of the Catering Company would like the Food Division to transfer 10,000 cans of its final product to the Restaurant Division for $30. The Food Division sells the product to customers for $70 per unit. The Food Division's variable cost per unit is $35 and its fixed cost per unit is $10. If the Food Division has 7,000 units available capacity, what is the minimum transfer price the Food Division should accept? $50 $35 $45.5 O $70 None of the above
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